Date: 24/06/2011

Global spending on wireless infrastructure to reach $43.2 billion in 2011

IHS iSuppli has reported global spending by wireless carriers on infrastructure is projected to rise by a significant 7.7 percent in 2011 to $43.2 billion.

The other findings reported by IHS iSuppli includes:

Following a decline of 7.2 percent in 2009 at the height of the recession and a mild recovery of 3.8 percent last year, wireless infrastructure spending growth this year is poised to be at its highest expansion level until at least 2015. In comparison, expenditures will be flat for the next two years, climbing 3.7 percent in 2014, and rising 1.3 percent the year after.

Though spending on infrastructure represents only one component of the overall capital expenditures by carriers, the metric is a closely watched indicator of the direction that the wireless telecommunications industry is headed. The other components of wireless capital spending, aside from infrastructure, include expenditures on software and network upgrades, as well as spending on non-infrastructure equipment such as cables, plants and site procurements. Total capital spending in 2011 by wireless carriers is anticipated to reach $134.6 billion, up 1.1 percent from $133.2 billion last year.

Compared to last year, spending in 2011 on wireless infrastructure will be up in all regions except in the combined sector represening Africa, the Middle East and Central America, where spending will fall to $1.9 billion, down from $2.1 billion in 2010. Expenditures this year will be highest in Asia-Pacific at $18.9 billion, followed by Europe at $11.5 billion, North America at $7.6 billion and Latin America at $3.3 billion.

In the developed nations, carriers continue to wrestle with the thorny issue of exploding data traffic on overloaded networks, brought about by the huge appetite among consumers for high-bandwidth mobile data services such as video and web browsing. Nonetheless, many carriers in the United States, Canada, Europe, Australia, Japan and South Korea are thought to be proceeding cautiously. Trials on 4G Long Term Evolution (LTE) networks may be starting, but many operators this year are expected to maintain focus on currently dominant 3G/3.5G technologies in order to extend the life of their investments.

For the developing countries, carriers will preserve capital spending on infrastructure this year at approximately the same level as that seen in 2010. The one potential exception to flat capital spending in 2011 is India, where the carriers that won wireless spectrum auctions last year are believed to be investing in 3G networks this year. In comparison, operators will slow down capital expenditures in China. Not only are significant portions of the 3G network build-out in the country completed, China's three main telecom providers also have announced reduced spending plans for 2011.

As carriers in the developed nations expand deployment of 4G, an increasing portion of their total capital spending will be devoted to that next-generation technology, designed to support mobile wireless access at very high data transmission speeds. By 2013, 4G networks will account for the largest portion of the wireless infrastructure market.